November 17, 2010

Empowered Employees Make the Difference, Says Four Seasons CEO Sharp

Hiring people who embrace the hotel's customer-focused credo has made the Four Seasons Hotels and Resorts chain a success, Founder Isadore Sharp told the Entrepreneurship Conference at the Stanford Graduate School of Business. And giving the firm's front-line employees power to make decisions has added to that.

STANFORD GRADUATE SCHOOL OF BUSINESS — Isadore Sharp knows that a key reason his hotel chain is one of the best places in the world to work is because he decided three decades ago to fire several top people.

In his keynote speech February 26 at the annual Stanford Graduate School of Business Entrepreneurship Conference, the founder, chairman, and CEO of Four Seasons Hotels and Resorts said that when the company expanded about 30 years ago, it made its credo more explicit: Workers should treat others the way they would like to be treated. Many companies have similar philosophies, but Four Seasons added a twist. "What was new," Sharp said, "was we enforced it."

That meant firing senior managers who weren't following the credo. "If we’re seen showing greater concern for power, prestige, and costs than for the customer and the values we profess, then we forfeit belief and trust along with our goal of trying to be the best."

When Sharp opened a modest motor hotel in Toronto in 1961 and called it the Four Seasons, he was simply a builder making a real estate play. "In all candor, there was no vision; there was no grand dream."

But he saw how important customer service was, and how the right employees could deliver that.

He said the hiring policy is crucial at Four Seasons, a place constantly included on Fortune magazine’s annual list of the best 100 companies to work for. Most companies hire for experience and fit. Four Seasons hires for attitude.

"We want people who like other people, and are therefore more motivated to serve them," Sharp said. "Competence we can teach; attitude is ingrained."

Sharp said marketing research found that customers value luxury, but that didn't necessarily mean elegant surroundings or gourmet meals. “"When we looked closely, it became clear that the greatest luxury for our customers was time. And service could help them make the most of that, giving them greater productivity, greater enjoyment."

But no one in a central office could ensure good service. "The outcome in our industry normally depends on the front-line employees — doormen, bellmen, waiters, maids, the lowest-paid people — and often, in too many companies, the least motivated. These front-line staff represent our product to our customers. In the most realistic sense, they are the product."

So, Four Seasons gives front-line workers the authority to make most decisions they feel are needed to satisfy guests. "When our employees are trusted to use their common sense, they can and do turn mishaps into new service opportunities. Then, what the customer remembers is not the complaint, but the outcome."

Seeing customers happy bolsters employees' self-esteem, Sharp said. "This requires managers who are less bosses than mentors and communicators, whose role is to bring out each individual’s best and weld them into a winning team."

Sharp spoke with pride about how employees reacted when a tsunami struck the Four Seasons in Maldives in 2004, doing whatever they could to ease people’s concerns and calm nerves. That included chartering a plane within 24 hours to fly every guest to safety. "They’re motivated by an inner need to do well by others."

He said employers often believe that workers value job security and competitive pay the most, but the Fortune best-places-to-work companies understand that job security is tentative in this economy, and other items are more important to workers than salaries.

"Employees in these firms value primarily three things: first, to work for leaders who inspire their best; second, a physical environment that makes work enjoyable; and third, and I think most important, a sense of purpose, and a feeling they’re working for more than a paycheck — that they're helping to build a company that they can take pride in. In short, some daily meaning along with their daily bread."

Four Seasons has 83 hotels with plans to grow to 150 within a decade. Sharp said the philosophy won’t change, not only because so many decisions are made at the hotel level, but also because virtually every senior leader is promoted from within, and so understands how important rank-and-file employees are.

He recalled having dinner with one of the owners of the chain's hotel in Istanbul about a year after it opened. She asked where he got the employees. Locally, he said.

"She said, 'No, no, no. These are not Turkish people.' I said, 'What do you mean?' She said, 'I have Turkish people working for me, and these are not Turkish people.' "

But they were, of course. They had just found the right place to work.

Deepak Bhatt is a communication, media engagement and publications professional. Currently he manages communication at the Indian Institute of Management Ahmedabad (IIMA), one of Asia’s finest B-schools. Before that, he was Vice President (Gujarat Operations), BW Businessworld magazine, one of India’s leading business magazines.

Current Role: At the IIMA, Deepak

1. designs and implements the external and internal communication strategies

2. contributes his expertise to building an agile, pro-active communication team and its systems

3. guides the online engagement and global outreach program

Key Qualities:

Deepak is a go-getter, someone who brings about significant impact in businesses processes and outcomes. He creates sustainable value and efficient systems wherever he works. His ability to think clearly and come up with actionable ideas has hugely contributed to his work practice.

Recognitions and Awards:

a. “Best Employee of the Month” at BW Businessworld Group

b. “Leadership Award in Project Management” by CE Worldwide

Before his current role at the IIMA, Deepak was Vice President (Gujarat Operations), BW Businessworld magazine, one of India’s leading business magazines. He spearheaded the magazine’s growth and reinforced its presence in the region during his tenure.

Earlier, Deepak acted as a Strategic Management Consultant. His transformational insights, research-based strategies and leadership qualities have made him a well-respected professional.